Part – B

Answer the following questions in one or two sentences

Question 21.
Why was structural reform implemented in Indian Economy?
Answer:
Indian economy introduced structural reforms to face the economic crisis in the form of balance of payments problem in 1991.

Question 22.
State the reasons for implementing LPG.
Answer:
To correct the weaknesses and rigidities in the various sectors of the economy India implemented LPG which is the triple pillars of New Economic Policy.

Question 23.
State the meaning of Privatization.
Answer:
Privatization means transfer of ownership and management of enterprises from public sector to private sector.

Question 24.
Define disinvestment.
Answer:
Disinvestment means selling of government securities of public sector undertakings to other PSUs or private sector or banks.

Question 25.
Write three policy initiative introduced in 1991 – 1992 to correct the fiscal imbalance.
Answer:

  1. Reduction in fertilizer subsidy.
  2. Abolition of subsidy on sugar.
  3. Disinvestment of a part of the government’s equity holdings in select public sector undertakings.
  4. Expenditures on welfare measures were reduced.

Question 26.
State the meaning of Special Economic Zones.
Answer:
SEZs is an area in which business and trade laws are different from rest of the country mainly aiming at increasing trade, investment and job creation.

Part – C
Answer the following questions in one Paragraph

Question 28.
How do you justify the merits of Privatisation?
Answer:
Privatisation was necessitated because of the belief that the private sector was not given enough opportunities to earn more money.


Question 29.
What are the measures taken towards Globalization?
Answer:
Globalization refers to the integration of the domestic economy with the rest of the world. Import liberalization through reduction of tariff and non-tariff barriers, opening the doors to foreign direct investment and foreign portfolio investment are some of the measures towards globalization.

Question 30.
Write a note on Foreign investment policy?
Answer:
The major feature of the economic reform opened gate to foreign investment and foreign technology. Foreign investment including FDI and FPI were allowed.

In 1991, the government announced a specified list of industries where in automatic permission was granted for FDI. Foreign Investment Promotion Board (FIPB) has been set up to negotiate with international firms and approve foreign direct investment in select areas.

Question 32.
Mention the functions of APMC.
Answer:

  1. To promote public private partnership in the ambit of agricultural markets.
  2. To provide market led extension services to farmer.
  3. To promote agricultural activities.
  4. To bring transparency in pricing system and market transactions.
  5. To ensure payments to the farmer for the sale on the same day.
  6. To display data on arrivals and rates from time to time in the market.

Question 33.
List out the features of new trade policy.
Answer:
The trade policy of 1 April 1992 freed imports of almost all intermediate and capital goods. Only 71 items remained restricted. This would affect the domestic industries. Rationalization of tariff structure and removal of quantitative restrictions.

The Chelliah Committee’s report had suggested drastic reduction in import duties. As a first step towards a gradual reduction in the tariffs, the 1991 -92 budget had reduced the peak rate of import duty.

Question 34.
What is GST? Write its advantages.
Answer:
GST is a comprehensive indirect tax levied on manufacture, sale and consumption of goods as well as services.

Advantages of GST :

  1. Removing cascading tax effect.
  2. Single point tax.
  3. Higher threshold for registration
  4. Composition scheme for small business.
  5. Online simpler procedure under GST.
  6. Defined treatment for e-commerce.
  7. Increased efficiency in logistics

Part-D Answer the following questions in about a page

Question 35.
Explain the objectives and characteristics of SEZs.
Answer:
The Special Economic Zones (SEZs) policy was announced in April 2000.
The major objectives of SEZs are :

  1. To enhance foreign investment especially to attract foreign direct investment (FDI) and thereby increasing GDP.
  2. To increase shares in global export.
  3. To generate additional economic activity.
  4. To create employment opportunities.
  5. To develop infrastructure facilities.
  6. To exchange technology in the global market.

Main characteristics of SEZs :
Geographically demarked area with physical security.

  1. Administrated by single body / authority.
  2. Streamlined procedures.
  3. Having separate custom area
  4. Governed by more liberal economic laws.
  5. Greater freedom to the firms located in SEZS.

Question 37.
Describe the salient features of EXIM policy (2015 – 2020)
Answer:
The new EXIM policy has been formulated focusing on increasing in exports scenario, boosting production and supporting the concepts like Make in India and Digital India.

  1. Reduce export obligations by 25% and give boost to domestic manufacturing supporting the “Make in India” concept.
  2. As a step to Digital India concept, online procedure to upload digitally signed document, and mobile app for filing tax, stamp duty has been developed.
  3. Repated submission of physical copies of documents are not required.
  4. Export obligation period for export items related to defence, military store, aerospace and nuclear energy to be 24 months.
  5. EXIM policy 2015 – 2020 is expected to double the share of India in World Trade from present level of 3% by the year 2020.This appears to the too ambitious.